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On Ugly Friday, Traders Learn What Goes Up Must Come Down


Today's financial recap and tomorrow's financial outlook.

Stocks closed the week on a negative note, with the S&P 500 falling 0.6% to 1,985.54, with all sectors in the red.

Equities have been grinding downward since the 2,011.17 top on September 4, but today was the first meaningful down day, with the S&P slicing through the 20-day moving average.

Investors aggressively shed risk, and we saw major declines in small caps, biotech, emerging markets, and housing names.

Utilities, typically considered a safer area, was the weakest sector, courtesy of the spike in the 10-year US Treasury Yield, which was boosted by some solid economic data.

Retail sales rose 0.6% in August, in-line with expectations. Excluding autos, sales rose 0.5%, also in-line. However, July's figures were revised higher.

The preliminary reading for September University of Michigan Consumer Confidence was 84.6, slightly exceeding the 83.3 consensus, and up from last month's 82.5.

Crude oil continued pulling back as concerns over demand weighed on buying activity.

eBay (EBAY) spiked as high as $53.07  on rumors that it was in talks to sell a stake to Google (GOOG). However, the company denied the chatter, and eBay ticked down from its highs, but still finished up 3.0% at $52.19.

Twitter (TWTR) announced this morning that it was increasing the size of its convertible notes offering to $1.8 billion from $1.3 billion.

There has also been strong apparent demand for the upcoming Alibaba IPO. According to a report from Bloomberg, Alibaba has enough interest to sell the entire deal at the high end of its $60 to $66 range, and it is possible that the price and/or size of the IPO will be increased.

In international news, the United States and European Union instituted new economic sanctions against Russia, despite the ceasefire with Ukraine.

Tomorrow's Financial Outlook

We'll be busy with economic data before the open Monday, with September Empire Manufacturing and August Industrial Production and Capacity Utilization data coming out before the open.

Depending upon how those numbers shape up, we could finally see a real move from the recent sideways action.

Today's drop was the first recent sign that the bears are ready to rumble.

Nonetheless, we can't ignore the bulls' relentlessness over the past two years, and it's possible they could pile back in on good news.

Twitter: @Minyanville

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No positions in stocks mentioned.

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